MPs under fire in Equitable Life row

Coalition MPs were last night accused of kow-towing to the Treasury after it emerged they have been sending carbon-copy letters to equitable life policyholders, fobbing off constituents who lost billions when the mutual insurer nearly collapsed a decade ago.

In a damning claim, Equitable Life chief executive Chris Wiscarson also accused the coalition government of implicitly supporting Sir John Chadwick's July report which recommended a meagre £400million-£500million payout to equitable policyholders.

'It is clear to me that MPs are being briefed to support the Chadwick report,' said Wiscarson.

Protest: Honor Blackman, who lost half her pension in the near-collapse, is leading the campaign

Parliamentary Ombudsman Ann Abraham called the Chadwick report 'unsafe
and unsound', and estimated a more reasonable payout should be based on
losses of £4billion-£4.8billion. Yesterday, equitable life called on
the Government to implement Abraham's recommendations in full.

Policyholders now fear that the coalition government, which came to
power promising to adhere to the Parliamentary Ombudsman's
recommendations, will offer a payout of as little as £400million.

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Hundreds of letters sent to equitable policyholders by coalition
MPs are very similar. Sometimes - as in the case of letters sent by
Conservatives David Nuttall, MP for Bury North, and Mike Freer, MP for
Finchley and Golders Green - they appear to follow a standard script.
Their wording is almost identical.

'It appears that a standard template has been provided to MPs to send on to policyholders,' said Wiscarson.

On other occasions the script deviates slightly. But in every
case, coalition MPs highlight the importance of the Chadwick report at
the expense of the ombudsman's findings.

In a letter sent by Nuttall, the Bury MP states that a figure
of £600million is 'support[ed]' by equitable Members Action Group
(Emag), a pressure group set up to support policyholders.

Emag spokesman Paul Braithwaite denied any connection with the
figure and accused the Treasury of talking up the Chadwick report in an
attempt to cut financial exposure to final compensation claims.

'The Treasury have been unbelievably devious,' said Braithwaite,
accusing the coalition of reneging on pre-election promises after
realising that compensation costs, in an era of supposed fiscal
austerity, could rise to nearly £5billion.

'It is as if there hasn't been a change of government.' Emag is set
to make its case to financial secretary to the Treasury Mark Hoban
today.

MPs will debate the Equitable Life (Payments) Bill next Tuesday in
Parliament; a final compensation sum will be announced on October 20.